Iraq’s Crisis and Recovery Outlook

Iraq is facing an unprecedented financial crisis due to a sharp decline in oil revenues, with exports dropping to around 3 million barrels in May and revenues totaling $300 million, compared to $6.5 billion in January. The government relies on reserves and borrowing to cover salaries, with expectations that Iraq's economy will contract by between 7.5% and 8% this year, mainly because more than 60% of economic activity depends on oil. However, reports indicate that Iraq has financial tools to weather the crisis, including sufficient dollar reserves and options to borrow from the International Monetary Fund, with the Central Bank still able to provide funding until the end of the year.

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